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Date: March 26, 2025 – Washington, DC
China’s rapid ascent in the global electric vehicle market is increasingly viewed by analysts as a deliberate strategy to transform automotive production into a geopolitical weapon. Rather than competing on price alone, Beijing appears to be building a dependency network that could give it leverage over countries reliant on its supply chains and finished vehicles.
“Beijing’s approach is not about incremental gains—it’s about flooding the market, capturing supply chains, and then using that dominance as a bargaining chip,” said Michael Dunne, CEO of Dunne Insights, during a policy roundtable hosted by the Asia Society Policy Institute. “When a trade or security dispute arises, China can simply say: ‘You need our cars, our batteries, our components. So what are you willing to give?’”
Dunne’s analysis comes as the US and European Union escalate efforts to counter Chinese state‑backed EV exports. In May 2024, the Biden administration imposed 100% tariffs on Chinese‑made electric vehicles, following a Section 301 investigation that found evidence of unfair subsidies. The EU launched its own anti‑subsidy probe in October 2024, with provisional duties expected later this year.
China’s domestic market is slowing after years of breakneck growth. According to the China Association of Automobile Manufacturers, monthly vehicle exports topped one million units for the first time in June 2024, and analysts project total exports could reach 12 million by the end of 2025. Nearly half are New Energy Vehicles (NEVs)—a category that includes battery‑electric and plug‑hybrid models.
The surge is driven by manufacturers like BYD, SAIC, and Geely, whose vehicles are often priced 30‑50% below comparable models from legacy automakers. In Southeast Asia, for instance, Chinese brands already command 70% of the EV market. This rapid penetration has alarmed governments in Thailand, Indonesia, and India, which worry their nascent automotive industries may be crushed before they can compete.
“The sheer scale of Chinese EV production makes it nearly impossible for other countries to match without similar state support,” noted Dr. Emily Tan, a senior fellow at the Center for Strategic and International Studies (CSIS) in Washington. “The US and its allies are now playing catch‑up, but the window to build independent supply chains is narrowing.”
China’s alleged “overcapacity”—a term Beijing rejects—remains one of the most contentious topics in global trade. The Chinese government maintains that its EV success is driven by market forces, innovation, and long‑term planning, not subsidies. Yet critics point to the billions of dollars in grants, tax breaks, and low‑cost loans that have flowed to automakers and battery producers.
A 2024 report by the Peterson Institute for International Economics (PIIE) estimated that Chinese state support for the EV sector exceeded $230 billion between 2016 and 2023. That figure, the report argued, has allowed Chinese firms to produce at a scale that depresses global prices and crowds out competitors.
“The overcapacity narrative is often misused,” countered Zhang Li, a trade analyst at the China Institute of Contemporary International Relations. “China’s competitiveness comes from integrated supply chains and aggressive R&D. Calling it ‘overcapacity’ is a convenient excuse for protectionism.”
For American automakers and battery manufacturers, the stakes are existential. Ford and General Motors have scaled back their EV investments, citing cost challenges and uncertain demand. Meanwhile, joint ventures with Chinese partners—such as Ford’s partnership with CATL for battery production in Michigan—face growing scrutiny from lawmakers over technology transfer risks.
“The US needs a coherent industrial strategy that combines trade tariffs with domestic manufacturing incentives,” said James Kirkpatrick, a former deputy assistant secretary of commerce for Asia. “But tariffs alone won’t solve the dependency problem. China controls 80% of global battery refining capacity and 70% of cathode production. We need to build alternative supply chains in North America, and that will take years.”
Developing nations face a delicate balancing act. Access to affordable EVs can accelerate decarbonization and reduce oil dependence. Yet forming deep supply‑chain ties with China risks being locked into a strategic orbit that limits future policy options.
Vietnam, for example, has welcomed Chinese EV investments while simultaneously negotiating a trade agreement with the EU. Thailand, already a major hub for Japanese automakers, is pivoting to host Chinese battery and assembly facilities. These moves have drawn warnings from Washington: the US has begun conditioning future technology sharing on partners’ commitments to diversify supply chains.
As the US and China compete for control of the next generation of mobility, EVs have become a central arena in the broader technology cold war. While China currently holds the manufacturing upper hand, American officials hope that tariffs, incentives, and partnerships with allies like South Korea and Japan can build a credible alternative.
“The chessboard is being set,” said Dunne. “But checkmate is far from certain. The question is whether the US can move fast enough to avoid being completely dependent on a strategic rival for the cars of the future.”
